Yara International ASA has offered 50 % of its shares in China Blue Chemical Ltd for sale, after differing priorities from the two companies were realised and a parting of the ways was decided as the best growth option.
Yara’s stake in the company was acquired in 2006 as a part of the IPO of China Blue Chemical and constituted a total of 9% of the total free float of the company. As part of this process China Blue Chemical and Yara also entered into a strategic investment agreement.
After a thorough process however, both companies now consider the likelihood of realising the intentions in the agreement as small and this partly reflects general market conditions and the priorities of the two companies. Yara announced that its shares are therefore offered for sale to re-deploy funds in a way that enhances the company’s overall growth strategy. Yara has also noted that its strategic intent to increase its presence in China remains firm.
With regard to the remaining 50% of Yara's holding, these shares are tied up under a Share Purchase Agreement with a further lock-up period of 18 months. The net gain from the sale is expected to be approximately $22m.